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Germanys October PPI rose 1.8% year-on-year, compared with an expected decline of 1.9% and a previous decline of 1.70%.Germanys October PPI rose 0.1% month-on-month, in line with expectations and down from -0.10% previously.Switzerlands trade balance in October was CHF 4.319 billion, revised from CHF 4.073 billion to CHF 3.99 billion in the previous month.On November 20th, analysts stated that Moodys will review Italys credit rating on Friday, potentially offering its first upgrade in nearly 25 years, reflecting growing market confidence in the public finances of the Eurozones third-largest economy. In May, Moodys upgraded Italys rating outlook from "stable" to "positive," while maintaining its "Baa3" rating, the lowest investment grade. At the time, Moodys cited stronger-than-expected fiscal performance and a more stable political environment as the main reasons for the outlook adjustment. Subsequently, the Meloni government further lowered its 2025 budget deficit target to 3% of GDP, complying with the EUs maximum deficit limit a year ahead of schedule. Since May 2002, when Moodys downgraded Italy from Aa3 to Aa2, it has not upgraded its rating. And since its downgrade in October 2018, it has remained unchanged. UniCredit stated that a potential upgrade would further confirm the continued positive trend in the overall assessment of Italys creditworthiness. Among major rating agencies, Moodys remains the most cautious.Barclays has raised its year-end 2026 target for the S&P 500 to 7,400, up from its previous forecast of 7,000.

As China's Inflation Misses Forecasts, NZD/USD Sinks Below 0.6320

Alina Haynes

Feb 10, 2023 11:53

 NZD:USD.png

 

As a result of China's National Bureau of Statistics (NBS) releasing weaker-than-anticipated Consumer Price Index (CPI) (Jan) data, the NZD/USD pair has dropped precipitously below 0.6320. The annual inflation rate is 2.1%, which is below the consensus estimate of 2.2% but above the prior figure of 1.8%. The monthly inflation rate declined by 0.8%, but inflationary pressures rose by 0.7%.

 

China's Producer Price Index (PPI) revealed a 0.8% deflation, which is 0.8% worse than the 0.5% predicted deflation and 0.7% previous deflation. It indicates that enterprises are aggressively discounting their goods and services at the facility gates. This is symptomatic of weak household demand.

 

The Chinese government and the People's Bank of China (PBOC) may pursue expansionary stimulus and monetary policies, respectively, as the Chinese economy recovers following the lifting of economic regulations.

 

There is little doubt that the Chinese economy will experience a rise in inflationary pressures as a result of further stimulus driving commodities in a bullish path. After overcoming the pandemic, western and other Asian nations have witnessed a similar circumstance.

 

Notably, New Zealand is one of China's most important trading partners, and lower inflation will require further assistance, which will benefit the New Zealand Dollar.

 

Meanwhile, the risk mood is negative as investors become anxious in advance of next week's release of Consumer Price Index (CPI) data in the United States. S&P500 futures ended Thursday's session on a negative note, as the market thinks that the Federal Reserve (Fed) will soon hike interest rates. The US Dollar Index (DXY) has difficulty maintaining a value greater than 103.00.

 

Following the release of January's good employment report, an unanticipated rise in inflation cannot be ruled out. Consumer spending can be stimulated by an increase in consumer expenditure, which may occur from a rise in employment.

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